Japan’s annual export growth short of market expectations
Print Edition
JAPAN’S annual export growth in February was short of market expectations, and a Bank of Japan policy-maker warned about the outlook as the world’s third-largest economy faces a sales tax hike next month that could dent economic activity.
The weaker-than-expected trade data come after a Reuters poll showed that business confidence was largely steady in March, but may slide after the sales tax is raised to 8 percent from 5 percent on April 1.
Tepid export growth has been a concern for policy-makers, who are counting on stronger shipments to help cushion any slide in domestic consumption after the sales tax rise.
Some market watchers, however, including a central bank board member, doubt there will be an early recovery in exports.
BOJ board member Takahide Kiuchi warned that exports could again disappoint and consumer spending could weaken, but said he did not think additional policy easing would help the economy in the long term.
Exports rose 9.8 percent in February from a year earlier, following a 9.5 percent gain in the previous month, as shipments of cars to China and Asia recovered from a Lunar New Year slowdown, Ministry of Finance data showed yesterday.
The modest rise compared with a 12.4 percent gain expected by economists in a Reuters poll, with US-bound shipments slowing sharply, due partly to a cold wave there. In terms of volume, exports rose 5.4 percent in February.
“Overall, exports remain sluggish, and the situation is severe,” said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
“Considering that one cannot expect 4-5 percent growth in the United States and Chinese growth remains tepid, both of which will weigh on Asian economies and Japan’s exports. You cannot rely on such a rosy scenario that exports could offset the impact of a sales tax hike.”
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